Allen Klein

For the American author, see Allen Klein (author).

Allen Klein
Allen Klein (center) signing the Beatles
Born	Allen Klein (1931-12-18)December 18, 1931 Newark, New Jersey
Died	New York City
Occupation	Accountant, record label owner, business manager
Years active	1956–2009
Organization	ABKCO Records

Allen Klein (December 18, 1931 – July 4, 2009) was an American businessman, music publisher, writers' representative, filmmaker and record label executive, most noted for his tough persona and aggressive, innovative negotiation tactics, many of which established higher industry standards for compensating recording artists. He founded ABKCO Music & Records Incorporated in 1961. While managing the Rolling Stones, he bought out the interests of former manager Andrew Loog Oldham, acquiring rights to all of the band's music composed before 1971, and after years of determined pursuit by the IRS was convicted of a misdemeanor charge of making a false statement on his 1972 tax return, for which he spent two months of late 1980 in jail. Though Klein was never proven to have participated in the scheme, Peter Bennett, head of promotion for ABKCO, had covertly and unlawfully sold copies of Beatles and solo Beatles releases, including The Concert for Bangladesh.

Klein revolutionized the income potentials of recording artists, who previously had been routinely victimized by onerous record company contracts. He first scored massive monetary and contractual windfalls for Buddy Knox and Jimmy Bowen, one-hit rockabillies of the late 1950s, then parlayed his early successes into a position managing Sam Cooke, and eventually managed the Beatles and the Rolling Stones simultaneously, along with many other artists, becoming one of the most powerful individuals in the music industry during his era.

Early life

Klein was born in Newark, New Jersey, the fourth child and only son of Jewish immigrants. His mother died of cancer very soon afterward, and Klein lived for a time with his grandparents, then subsequently in a Jewish orphanage, until his father remarried shortly before Klein's 10th birthday. In early work experience with a magazine and newspaper distribution company he showed an astounding facility with numbers, and learned alarming lessons about how profits were often systematically concealed from those who deserved them. Eventually he would realize that much the same situation existed in popular music, where labels routinely took much profit from the transitory careers of the artists who created the profit-generating music, and gave precious little back.

After military service, and with the assistance of the G.I. Bill, Klein majored in accounting at Upsala College, graduating in June 1957. He soon married Betty Rosenblum, a Hunter College student seven years his junior.

Sam Cooke

In 1963 Klein began a business partnership with Jocko Henderson, an urbane black disc jockey who had daily radio shows in both Philadelphia and New York. Henderson hosted lavish, profitable live rhythm and blues shows at the Apollo Theater in Harlem, and formed a partnership with Klein to begin doing the same in Philadelphia. As Henderson's partner, Klein was introduced to Sam Cooke, a preeminent talent equally adept at writing, producing, and performing his numerous hit records. Cooke had scored four top ten hits between 1957 and 1963, including his number one hit, "You Send Me", among 33 records in the top 100 in that period. Although Cooke was clearly making his label, RCA Records, a great deal of money, label executives nonetheless wouldn't honor his many requests for a review of his accounts. Klein forced the reluctant label to open its books for a thorough audit. Shortly afterward, RCA agreed to re-negotiate Cooke's contract. Klein secured for his client a genuinely groundbreaking deal giving Cooke greater artistic control and more paths to income than any other recording artist of the era. Specifically, it allowed Cooke to in effect lease new recordings to RCA for a three-year window, with a two-year renewal option, after which he would retain the rights in perpetuity. RCA agreed to pay Cooke close to $500,000, which consisted of an advance payment and annual renewal payments. Such terms are now an industry commonplace, and a huge source of artists' revenues. Klein secured them in his very first contract negotiations with a major label.

Soon Klein was legitimately able to woo new clients with an extravagant, yet credible promise. He would ask them if they had talent. When they answered yes, he would ask them if they had a million dollars. When they answered no, he would tell them that he could get it for them. The Dave Clark Five, who employed Klein strictly as a negotiator, was about to sign a contract extension for $250,000, for which they faced a likely tax bill of 90%, Klein engineered a 20-year payout which, coupled with an investment plan, would both circumvent onerous tax rates and produce far more revenue overall. This, too, subsequently became a commonplace tactic in the industry, resulting in win-win situations for both artists and labels, if not for tax collectors.

Mickie Most

Intent on signing the Beatles, Klein sensed opportunity in 1964, when New York disc jockey Murray the K told him that Brian Epstein, the band's manager, wanted Sam Cooke as an opening act for an upcoming American tour. He asked RCA executive Joe D'Imperio how much RCA would pay the Beatles if they left EMI. D'Imperio said RCA would pay one million dollars and a royalty of 10 percent. Klein rushed to England and relayed the offer to Epstein, saying that RCA would pay two million dollars. The offer was declined, but Klein worked feverishly to make his trip pay off, scouring the London music scene for a score. He found it in the person of Mickie Most, a former singer who was the savvy producer of hits for the Animals and for Herman's Hermits. Klein extended to Most a million-dollar promise, adding that if he failed to deliver in only one month, Most owed him nothing. Klein did deliver, through strategic re-negotiations of existing contracts and new producing opportunities for RCA, including offers for Most to produce for both Sam Cooke and Elvis Presley. Though the latter two prospects did not materialize, Most was suddenly one of the most talked-about and financially gratified figures in the English recording industry, and Klein was a step closer to eventual agreements with both the Beatles and the Rolling Stones.

His victories for Most won Klein access to several key English musicians. He eventually negotiated vastly improved deals for the Dave Clark Five, the Animals, the Kinks, Herman's Hermits, Lulu, Donovan, and Pete Townshend of the Who.

The Rolling Stones

Andrew Loog Oldham, co-manager of the Stones, saw in Klein a terrific business adviser and ally, one who could help him win an incipient power struggle with Eric Easton, a music business veteran who was then the other half of the band's management team. Barely 21, Oldham was profoundly important in the development of the Stones' image, and in initiating the songwriting partnership of Keith Richards and Mick Jagger. After some management mishaps, blame for which fell at Easton's feet, and Jagger's ascension in the band's hierarchy following "(I Can't Get No) Satisfaction", the Stones' first number one record in America, Oldham sought and received Jagger's blessing to bring Klein aboard for re-negotiation of the group's contract with Decca Records. The label offered the band the opportunity to make $300,000, if their records continued to sell. Klein countered with, and quickly secured, an arrangement paying the Stones twice as much, in the form of an advance. He also forced London Records, Decca's American subsidiary, to sign a separate contract. They did. It too was for $600,000. By the time Klein subsequently re-negotiated the deal one year later in his new role as the group's co-manager, Easton having been removed, the Stones were guaranteed $2.6 million. When the Beatles learned that the Stones had landed a deal infinitely better than the one they had, Paul McCartney pestered Brian Epstein about his previous refusal to hire Klein. Meanwhile, Klein offered the Stones a million-dollar minimum guarantee to let him become their music publisher, based on his faith in the Jagger-Richards songwriting team. He also arranged for a level of tour support and publicity far above anything the band had ever previously experienced for the Stones' 1965 American tour in support of the album December's Children. Featured on a Times Square billboard, they were mobbed by fans in front of their New York hotel and needed 15 minutes just to get from curbside to the far side of the lobby.

Jagger, who had studied at the London School of Economics, gradually became distrustful of Klein, particularly for the latter's ability to insert himself as a profit participant in the group's ever-growing financial picture. For example, in 1968 Klein very profitably bought out Oldham's share in the band for $750,000. Perhaps more importantly, when Klein subsequently became involved with the Beatles, his energies were thereafter far more dedicated to that band's affairs than to the concerns of the Stones. In 1970, on the occasion of needing to negotiate a new contract with Decca, Jagger announced that Klein would be replaced as manager by Prince Rupert Loewenstein, a titled merchant banker who had previously been an adviser to the Stones in setting up tax-avoidance mechanisms.

Cameo-Parkway

In February 1967, with an eye toward producing films and finding a way to invest his clients' money, Klein attempted to acquire Metro-Goldwyn-Mayer. His hopes were blunted when Edgar Bronfman, Sr., heir to the Seagram fortune, took control of the firm. Klein then turned his attention to Cameo-Parkway Records, a Philadelphia-born, Los Angeles-based label which had enjoyed hits in the late 1950s and early 1960s, thanks to Chubby Checker, Bobby Rydell, Dee Dee Sharp and others, but which by 1967 was no longer prospering. It was one of the first publicly traded record companies, making it ideal for a financial maneuver Klein had in mind, known as a reverse acquisition. It was meant to take ABKCO public via its being acquired on paper by Cameo-Parkway. By July 1967, Klein and his associate Abbey Butler had acquired a controlling interest. The stock price quickly septupled. Klein leveraged his Cameo-Parkway stake into the planned reverse acquisition of ABKCO by the label.

The Beatles

To have the Beatles as his clients was Allen Klein's greatest career goal. After their original manager, Brian Epstein, died in August 1967, in January 1968 the group formed Apple Corps, which they announced in May 1968. They hoped it would provide the means for correcting Epstein's unfortunate business decisions, which had both limited their incomes and ensured high tax burdens. Although "Hey Jude", the Beatles' first Apple release, was an enormous success, the label itself was a money pit, with little accountability for how money was being spent. Several managers were considered, including Lord Beeching. Paul McCartney wanted the group to be managed by his father-in-law, Lee Eastman, and brother-in-law, John Eastman. Klein contacted John Lennon after reading his press comment that the Beatles would be "broke in six months" if things continued as they were. Klein pressed for an audience, and overcame various obstacles, including the fact that Lennon had instructed Peter Brown, an Apple director looking after the Beatles' personal business, not to put Klein's calls through. But the financial marvels Klein had accomplished for the Rolling Stones and numerous others whom the Beatles knew soon won Klein an introduction. John Lennon, George Harrison and Ringo Starr were won over by Klein's track record and in-depth understanding of both music and the music business. Following rancorous London meetings with both Eastmans, Klein emerged in 1969 as the Beatles' manager while the Eastmans were named the group's attorneys. Once in charge of Apple, Klein fired a large number of Apple employees, including Apple Records president Ron Kass, and replaced them with his own people. He closed Apple Electronics, which was headed by Alexis Mardas. Mardas resigned his directorship in May 1971.

Klein was hit with his first crisis in managing the Beatles when Clive Epstein, brother of Brian Epstein and chief heir to NEMS, the management company his brother had founded, sold NEMS to Triumph, a British investment group managed by Leonard Richenberg. NEMS held a 25% stake in the Beatles' earnings, which Klein as well as the Beatles themselves desperately wanted to buy out. This led to tough negotiations with Triumph. Klein ultimately secured the Beatles' rights in their previous work for just four annual payments amounting to 5% of their earnings. However, in the lead-up to those negotiations Richenberg commissioned a hostile investigative report on Klein, which The Sunday Times ran under the headline "The Toughest Wheeler-Dealer in the Pop Jungle."

An even more important battle to secure the Beatles a financial situation commensurate with their worldwide popular acclaim was with Northern Songs Ltd., the publishing company. Northern Songs, a legacy of Brian Epstein's lack of business acumen, was managed by Dick James, whom Epstein had rewarded with the Beatles' publishing rights in return for his helping them get placed on a TV show, Thank Your Lucky Stars, early in their career. But James had constructed a contract that gave him an outsized share, and Epstein hadn't understood its implications. James knew that Klein would soon eliminate his perks, so he quickly offered to sell Northern Songs to ATV, run by entertainment mogul Lew Grade, rather than allow Lennon and McCartney an opportunity to buy back publishing rights to their own songs. Klein worked feverishly to pull together a consortium which would beat Grade's offer, but ultimately his efforts were derailed by infighting between McCartney and Lennon themselves.

In the fall of 1969, while Klein was in the midst of renegotiating the Beatles' substandard recording agreements with EMI, Lennon told him of his plans to quit the group. It was agreed that this was the wrong time to either make or announce such a move. EMI was loath to re-negotiate, but their American subsidiary, Capitol Records, was so impressed by Abbey Road that they agreed to vastly improved royalty terms. McCartney joined his band mates in endorsing the deal Klein had secured.

Abbey Road proved to be the Beatles' last true collaboration, but Klein saw in an unfinished and all-but-discarded previous album and related documentary project, both titled Get Back, a means of getting another record out of the splintered group while also fulfilling their obligation to provide one more film to United Artists, the studio which had previously released both A Hard Day's Night and Help! Phil Spector, the producer famous for his "wall of sound" recordings with The Ronettes, The Righteous Brothers, and many others, was eager to sign on as producer for the record, which was eventually titled Let It Be. McCartney didn't approve of Spector, but the other Beatles did. This proved to be McCartney and Klein's last face-to-face meeting. However, Apple made $6 million in the first month following the May 1970 release of the record and the film.

Unhappy with production decisions on the Let It Be album and the other Beatles' decision to hire Klein as their manager, McCartney went public with his plans to exit the Beatles in April 1970. He wanted to be released from his partnership with Lennon, Starr, and Harrison, who had in recent months proved a steady three-to-one majority against McCartney's proposals. The Eastmans convinced McCartney to file suit against his former band mates for dissolution of the Beatles' partnership, which he did on December 31, 1970.

It was clearly proven in the resulting 11-day trial that Klein's management had rescued the Beatles financially, but McCartney's claims of mismanagement were given credibility by the then recently delivered conviction of Klein in the United States for failing to file tax forms "in a timely manner." The taxes in question had been paid; it was only a question of late paperwork. However, the judge ruled in McCartney's favor in March 1971. He decided that the combined financial affairs of the former Beatles should be placed in the care of a receiver until mutually acceptable terms for their break-up could be found. With that stroke, Klein retained a position in the post-breakup, solo careers of Harrison, Starr, and Lennon, but was no longer in charge of their affairs as a partnership.

Solo Beatles

For a time after the Beatles' contentious divorce, George Harrison was the most popular and successful of the former group. His November 1970 three-disc set, All Things Must Pass, was a sales triumph, and produced hit singles in "My Sweet Lord" and "What Is Life". In the spring of 1971, Harrison learned from his friend and mentor, Ravi Shankar, about the desperate people of Bangladesh, who had been clobbered both by military violence and a vicious cyclone. Harrison immediately set to organizing an event which would take place in Madison Square Garden within just five weeks, The Concert for Bangladesh. Klein hustled to get the invited artists, including Bob Dylan and Eric Clapton to play for free while donating their shares of royalties to charity, and convinced Capitol Records to grant an unprecedented 50% royalty rate. Ironically, Shankar refused to donate his own royalties. Klein also shepherded the filmed concert documentary, also called The Concert for Bangladesh. The film and the album raised over $15 million. The IRS attempted to tax the income, and $10 million of that amount was held back for years.

Despite their initial enthusiasm to have him appointed to handle the Beatles' affairs, both Harrison and John Lennon subsequently became disenchanted with Klein. Harrison's "Beware of Darkness" from his All Things Must Pass album contained the lyric "beware of ABKCO" in an early demo version; while Lennon's "Steel and Glass" from the 1974 Walls And Bridges album is also a thinly-veiled dig at Klein - similar to his critique of Paul McCartney in "How Do You Sleep?" from the Imagine album several years earlier.

Phil Spector

In 1988 Klein began managing Phil Spector’s business affairs, including his publishing and recorded assets. Although Spector had not been active as a producer for several years, his early work was still frequently broadcast and also licensed for film soundtracks. Spector’s publishing company, Mother Bertha Music, Inc, was controlled by Trio, a Jerry Leiber and Mike Stoller company, which was in turn administered by Warner/Chappell Music. Warner/Chappell was making appropriate payments, but significant amounts were not being passed on to Spector. Klein's goal was to get Spector all the money owed him, and also to wrest a concession allowing Spector to co-administer the future licensing of his music. Klein and Spector brought suit in federal court. A courtroom win would secure the first goal, but not the second, so Klein advised a settlement strategy. It proved successful.

Films and theater

The multi-Academy Award-winning 1955 film Marty, an independently-produced movie that undercut the Hollywood studio system, provided a business template which Allen Klein closely studied and later adapted to the recording industry. In the late 1950s Klein shared an office with press agent Bernie Kamber, who represented Burt Lancaster, one of Marty's producers. Klein absorbed much from Kamber on how the producers had structured their business model, a paradigm whose strength derived from the fact that artists drove marketplace success, not film studios or record labels, and that intense preparation and canny negotiation could lavishly reward artists and their representatives. In 1961 Klein did accountancy work for an independent film, Force of Impulse, where he formed lasting relationships that he would turn to for many film projects of his own. In 1962 Klein produced a film called Without Each Other. He took it to the Cannes Film Festival and later claimed that it had won the "Best American Picture Award" there, though no such award actually existed. A distributor never materialized, but Klein's enthusiasm for film persisted.

Subsequently he produced four separate films in the Spaghetti Western genre, a lean-and-mean style of cowboy movie with taciturn heroes and explosive violence. Klein utilized actor Tony Anthony, whom he'd met on Force of Impulse, in all four. Their films included a trilogy comprising A Stranger In Town, The Stranger Returns, and The Silent Stranger. Blindman featured Ringo Starr as a Mexican bandit, Anthony as its lead, and Klein as an extra. Klein also produced the 1978 film The Greek Tycoon, in which Anthony Quinn and Jacqueline Bisset played characters based on Aristotle Onassis and Jacqueline Kennedy.

Lennon directed Klein's attention to El Topo, a surrealistic western by the Chilean director Alejandro Jodorowsky. Inspired by Lennon's enthusiasm, Klein bought the film and put it in American release. He then produced and financed Jodorowsky's next film, The Holy Mountain, an allegorical journey with psychedelic overtones. Later the producer and the director's planned collaboration on a proposed film version of The Story of O was halted when Jodorowsky refused to make the film and to return substantial advance monies.

The Concert for Bangledesh proved to be Klein's most successful film. The haste with which the concerts were mounted and the technical aspects of filming were addressed resulted in a film of great spontaneity and a few notable miscues, such as Harrison flubbing lyrics to one of his own songs. Proceeds from The Concert for Bangladesh, like those of the three-disc album of the same name, benefited UNICEF. It was the first great rock concert for charity, with many antecedents which include The Secret Policeman's Ball series, No Nukes, Nuclear Disarmament Rally, Live Aid, Farm Aid, and A Tribute to Heroes.

Two early-1980s attempts at Broadway production also marked Klein's participation in the dramatic arts. It Had to be You, a romantic comedy, starred Renée Taylor and Joseph Bologna. It ran for barely a month. Next Klein produced The Man Who Had Three Arms, an Edward Albee play. Although Albee had also written big successes in The Zoo Story and Who's Afraid of Virginia Woolf?, the play Klein produced had an even shorter run than his previous attempt.

Final days

Klein was diagnosed with diabetes at age 40. He suffered several heart attacks over the years, of varying severity. In 2002, along with Jody Klein, a son who later became president of ABKCO, he negotiated a mutually beneficial deal with the once-estranged Rolling Stones to coincide with their 40th anniversary tour. Forty Licks was a 40-song, two-CD compilation of vintage Stones material. Half of the desired tracks were ABKCO property. Allowing the Stones to anthologize them potentially diluted their future value to Klein's own firm. In 2003 Klein negotiated with Steve Jobs to make ABKCO's Rolling Stones songs available on iTunes. In 2004, when ABKCO collected a Grammy Award for a Sam Cooke documentary, Legend, Klein fell and broke bones in his foot, requiring surgery. He was subsequently diagnosed with Alzheimer's disease. He died on July 4, 2009, in New York City. The cause of his death was respiratory failure. Yoko Ono and Sean Ono Lennon attended Klein's funeral. Andrew Loog Oldham testified at a subsequent memorial service that Klein had greatly magnified the success of the Rolling Stones.

In June 2015, American journalist Fred Goodman published a biography of Klein, Allen Klein, The Man Who Bailed Out the Beatles, Made the Stones, and Transformed Rock & Roll.

External links

• Allen Klein - Daily Telegraph obituary
• Allen Klein at the Internet Movie Database